Danske Bank struggles in Ireland despite profit surge

Danske Bank’s Irish operations continued to struggle in the first half of the year despite an improved performance overall.

Net profit in the first half of 2014 was €1.15bn; an increase of 88% on the same period in 2013.

Commenting on the half- yearly results, Danske Bank chief executive Thomas Borgen attributed the bank’s improved performance to declining expenses and an improving impairment situation.

“We saw good progress in the first half of 2014. We increased net profit 88% from the level in the first half of 2013, and we’re moving in the right direction.

“Expenses are declining as expected, the positive trend in impairments is continuing, and we saw growing customer activity in the second quarter of 2014.”

However, the bank’s non- core activities, of which some of its Irish operations are part of, performed poorly, posting a loss of €107m.

This loss is largely accounted for by the Irish arm of its operations, according to the report, which also adds that the winding-up of its non-core activities is proceeding as planned.

Losses on these activities were further worsened by impairment costs incurred by the bank, of which Ireland accounted for 40%.

At the beginning of this year, all Irish business banking and personal banking customers were transferred to the bank’s non-core activities, which consists mainly of loans to commercial and residential investment property customers in Ireland.

Danske is currently winding up its Irish retail operations while also reducing its exposure to the Irish mortgage market.